The German Betting and Gambling Market - Report Liberalising a giant gambling market

Transcription

1 The German Betting and Gambling Market - Report Liberalising a giant gambling market Munich/London, March 2012 Go to to obtain full report. In cooperation with the following legal experts: Arendts Anwälte

2 Summary In March the EU Commission issued its concluding opinion on the German federal/national liberalisation plans. Although this statement will not end the political discussions and many issues still have to be worked out in detail, for the time being this is the final step toward a liberalisation of the German gambling market. The discussion about the liberalisation of the German betting and gambling market has been going on since the Gambelli decision of the ECoJ back in Now, years later, the course is set for the liberalisation, and from 2012 on the German gambling market will be very different from what it is now. In recent months, MECN has remained silent in order to avoid intervening in the political discussion and focus on our role as objective researchers. But now it s time to get back to MECN s home turf. A giant moves toward liberalisation Two potentially giant gambling markets - Germany and the U.S. - are moving toward liberalisation. But whereas liberalisation of the U.S. market is still only a future potential, Germany is ready to get the liberalisation of the gambling market underway now. And the facts are compelling: - Size matters with EUR 45 billion on the table In Germans wagered (turnover) a total of nearly EUR 45 billion, and gross revenues topped EUR 10 billion, with gambling machines leading the way. - Online gambling worth ca. EUR 1 billion and will grow to EUR 1.7 billion by 2015 The licensed online gambling market must start from scratch again because online gambling was almost completely prohibited in recent years. And there is a big market share to grab: according to MECN s estimate, the grey online gambling market is worth ca. EUR 1 billion (gross revenues), with online poker the biggest segment (the second biggest market worldwide). MECN and industry experts expect that by 2015 the total online gambling market (licensed and unlicensed) will grow to EUR 1.7 billion, with online lotteries driving this development. - Economic stability Whereas other regions scheduled for liberalisation (e.g., Spain, Greece) are at the same time undergoing serious economic downturns, Germany, already Europe s largest economy, enjoys stable growth with record-breaking employment rates. Liberalisation raises many complex issues Particularly after the experience in other markets such as France, the announcement of a coming market liberalisation no longer prompts immediate enthusiastic applause but rather gives rise to important questions: What are the tax rates? What other regulations will be imposed (e.g., advertising restrictions, online identification processes, IT systems,...)? What is the size of the market? How much will the market still grow, or is it perhaps already saturated? What happens to existing German.com-customers? Increased complexity calls for more sophisticated analyses The increased complexity of the market has also led to increased demands on market research and analyses - simple and short answers no longer work. Therefore, MECN spent several months compiling the most comprehensive, detailed, and objective report (ca. 120 pages) on the German betting and gambling market (not a commissioned study). Content of the report The complex analyses cover many highly relevant issues: - Liberalisation on the federal/national level Up-to-date and in-depth information and analysis about the ongoing federal liberalisation (new Interstate Treaty on Gambling), including detailed explanations of regulations (e.g., taxes,...). - Schleswig-Holstein licenses Comprehensive and authoritative analysis of the liberalisation (incl. betting, casino, and poker) in the German state of Schleswig-Holstein. This includes in particular a discussion of the relevance of this license for any nationwide offers in Germany. Copyright Strictly Enforced 2

3 - market figures In-depth assessment of market sizes up to. In particular, we focused on the retail and online sports betting market, and in some cases our market estimates differ significantly from several other earlier market evaluations. - Forecasts to 2015 Detailed forecasts (to 2015) for all online gambling segments as well as for the retail sports betting market. - Analyses of all sectors The report analyses all sectors of the German gambling market (betting, lottery, casinos, and gambling machines) with a special focus on sports betting and online gambling. - Analyses of operators' strategies Analyses of operators' strategic plans for Germany, relevant online and retail players today and in the future,... - Unique insights through a survey of market insiders Many analyses are based on the results and unique insights we gathered from our extensive survey of German market insiders and operators. Support of top local experts As with our previous reports, MECN was again able to gain the support of top local experts as partners for the report. For the legal and regulatory chapters, for example, we cooperated with several renowned experts including the lawyers of Arendts Anwälte. In addition, the researchers Ingo Fiedler and Ann- Christin Wilcke of the University of Hamburg provided unparalleled insights into the German online poker market. In total, the report has ca. 120 pages and 88 graphs/exhibits. Table of contents PART 1 INTRODUCTION 1 A GIANT MOVES TOWARD LIBERALISATION 5 2 KEY DEMOGRAPHIC AND ECONOMIC FIGURES 7 3 OVERVIEW OF THE GERMAN BETTING AND GAMBLING MARKET Overall structure of the market Size of the German betting and gambling market 9 PART 2 LIBERALISATION OF THE GERMAN MARKET OPPORTUNITIES, CHALLENGES, AND STRATEGIES 4 STATUS QUO WILL LIBERALISATION CHANGE THE GAME? 12 5 THE NEW GERMAN INTERSTATE TREATY ON GAMBLING DETAILS AND ANALYSES Status of the new regulation Requirements for licensees The tax scheme Dealing with non-licensed offers Measures promoting responsible gambling Key points of criticism Concluding opinion of the EU Commission of March 2012 green light or the end of the treaty? 20 6 SCHLESWIG-HOLSTEIN LICENSES ATTRACTIVE ALTERNATIVE OR TO GOOD TO BE TRUE? Schleswig-Holstein s gambling law key details of the regulations Status and evaluation The key question: Will a Schleswig-Holstein license be valid throughout Germany? 26 Copyright Strictly Enforced 3

4 7 EFFECTS OF A MARKET LIBERALISATION LESSONS LEARNED IN FRANCE Overview of French market liberalisation Status quo, successes, and failures 34 8 SHOULD STATE/PUBLIC MONOPOLIES FEAR A LIBERALISATION? 39 9 LIBERALISATION BEYOND THE CURRENT STATUS - WHAT CAN BE EXPECTED? STRATEGIC PLANS OF THE OPERATORS 43 PART 3 THE GERMAN BETTING MARKET 11 OVERVIEW AND STRUCTURE OF THE GERMAN BETTING MARKET THE RETAIL SPORTS BETTING MARKET Market size and key figures Overview of the biggest retail betting operators in Germany HORSE RACE BETTING MARKET THE ONLINE BETTING AND GAMBLING MARKET Market size and key figures Detailed analysis of online betting in Germany market size, key players, growth, Overview of key online gambling and betting operators in Germany OUTLOOK AND FORECASTS Forecast for the German online betting and gambling market Forecast for the German retail sports betting market The future market players and their chances of success Competitive advantages and disadvantages of key market players The winners and losers future market relevance of key market players The future relevance of the grey market Additional effects on other relevant market sectors sports, service/it providers, 82 PART 4 OTHER SECTORS OF THE GERMAN GAMBLING MARKET 16 ONLINE POKER IN GERMANY THE GERMAN CASINO MARKET History and development Legal framework Market size and key figures Overview of casinos in Germany and key operators THE GERMAN LOTTERY MARKET History and development Legal framework Market size and key figures Key lotteries and market players THE GERMAN GAMBLING MACHINE MARKET History and development Legal framework The new regulations for gambling machines and their impact Market size and key figures COMPANY PROFILES OF RELEVANT OPERATORS METHODOLOGY 114 Copyright Strictly Enforced 4

5 Exhibits Exhibit 1: The race for the German gambling market is on investment plans of online gambling operators results of MECN survey Exhibit 2: Core sectors of the German gambling market Exhibit 3: Size and breakdown of the German gambling and betting market gross revenues Exhibit 4: Size and breakdown of the German gambling and betting market turnover/wagers Exhibit 5: Breakdown into licensed and grey market gross revenues Exhibit 6: Breakdown and development of the licensed gambling market turnover 2005 to Exhibit 7: Breakdown and development of the licensed gambling market gross revenues 2005 to Exhibit 8: Advertising of unlicensed/foreign operators in Germany long before liberalisation examples Exhibit 9: Will there be further significant changes to the Interstate Treaty on Gambling and/or the associated state laws results of MECN survey Exhibit 10: When will the first Schleswig-Holstein licenses be issued and will a new government stop the licensing process results of MECN survey Exhibit 11: Will the Schleswig-Holstein licenses be valid throughout Germany results of MECN survey Exhibit 12: Will a Schleswig-Holstein license increase the legal certainty for offers throughout Germany results of MECN survey Exhibit 13: How long will the Schleswig-Holstein license be valid, and will a new government prevent licensees from accepting customers from the rest of Germany results of MECN survey Exhibit 14: Federal/national or Schleswig-Holstein license assessment and analysis Exhibit 15: Will the holders of Schleswig-Holstein licenses use their licenses right away for nationwide offers results of MECN survey Exhibit 16: Does it make sense to apply for BOTH a SH-license and a national/federal license results of MECN survey Exhibit 17: Overview of French online licenses vs. French offers Exhibit 18: Development of visitors of key French gambling sites since liberalisation Exhibit 19: Turnover/wagers, gross revenues, and net revenues of the French online sports betting market in Exhibit 20: Breakdown of French online sports betting market by type of sport Exhibit 21: Growth development of the French online sports betting market in the first 1.5 years after the liberalisation Exhibit 22: Media/marketing spending and breakdown by channel/media of the French online gambling market 2010 to Exhibit 23: Development of FDJ s sports betting sales before and after the liberalisation 2007 to Exhibit 24: Sectors/products most likely to be liberalised in the long term in Germany results of MECN survey Exhibit 25: Examples of private online lottery operators Exhibit 26: Most likely strategies for private operators results of MECN survey Exhibit 27: Will some operators try to get a license but not use it results of MECN survey Exhibit 28: Will a German online betting license pay off financially for private operators results of MECN survey Exhibit 29: Number of private operators that will make the effort to obtain a national/federal betting license results of MECN survey Exhibit 30: Investment plans of online gambling operators in Germany results of MECN survey Exhibit 31: Online betting advertising shortly before the liberalisation examples Exhibit 32: Overall market size of the German betting market in Exhibit 33: Breakdown of betting market into licensed and grey market gross revenues Exhibit 34: Development and breakdown of the licensed betting market in Germany 2005 to Exhibit 35: Customer segmentation and key operators in each segment Exhibit 36: Two kinds of betting shops in Germany traditional betting shop vs. shop-in-shop/terminals Exhibit 37: Market share of key retail sports betting operators in Germany Exhibit 38: Number of private sports betting shops in Germany, Ø gross revenue per shop, and overall retail sports betting market size in Exhibit 39: Size and breakdown of German retail sports betting market in Copyright Strictly Enforced 5

6 Exhibit 40: Tipico betting shop Exhibit 41: Development of Jaxx/Mybet s retail and online betting revenues 2009 to Exhibit 42: Key business figures of Mybet 2009 to Exhibit 43: Bet3000 betting shops Exhibit 44: State lottery betting point of sale Exhibit 45: Betting sales and gross revenue development of German state lotteries 2005 to Exhibit 46: Gross revenue development and breakdown of state lotteries betting products 2005 to Exhibit 47: Development and breakdown of German horse race betting market 2005 to Exhibit 48: Revenue made in Germany by key online gambling operators Exhibit 49: Total German online gambling market size (gross revenues) and segment breakdown in Exhibit 50: Key German online sports betting websites Exhibit 51: Market shares of key online gambling operators in Germany Exhibit 52: Annual growth rates for various online gambling segments for 2013 to 2015 MECN survey results Exhibit 53: Forecast for total (licensed and unlicensed) German online gambling market to 2015 Exhibit 54: Segment breakdown of German online gambling market vs Exhibit 55: Development of number of private sports betting shops, Ø gross revenue per shop, and overall market size to 2015 Exhibit 56: International benchmarking of retail sports betting revenue per capita Exhibit 57: Groups of market players in the German betting market and their future market potential results of MECN survey Exhibit 58: Will there be a significant number of new market players? Exhibit 59: Operators in the German online betting and gambling market and their future market relevance results of MECN survey Exhibit 60: Operators in the German retail betting market and their future market relevance results of MECN survey Exhibit 61: Will there be an increasing consolidation in the German betting market in next 2-3 years results of MECN survey Exhibit 62: Can unlicensed Internet offers be effectively prevented from reaching customers results of MECN survey Exhibit 63: Grey market share in the German online sports betting and lottery gambling market (2013 and 2015) results of MECN survey Exhibit 64: Will the payout rates decline once an operator is licensed in Germany results of MECN survey Exhibit 65: The impact of betting tax on odds/payouts Comparison of odds of key operators under different regulations Exhibit 66: Market model of the German sports betting market Exhibit 67: Active online poker players in Germany in international comparison Exhibit 68: Active online poker players in Germany in % of population in international comparison Exhibit 69: Active online poker players in Germany in % of Internet users in international comparison Exhibit 70: Key player data of German online poker players sessions, playing time, multi-tabling, rake per hour,... Exhibit 71: German online poker players by age Exhibit 72: Active online poker players per German state in % of population Exhibit 73: Breakdown of German online poker players by state/region Exhibit 74: Development and breakdown of German casino market 2005 to Exhibit 75: German online casino vs. land-based casino market in Exhibit 76: Development and breakdown of sales/turnover of German lottery market 2005 to Exhibit 77: Development and breakdown of gross revenues of German lottery market 2005 to Exhibit 78: German online lottery vs. retail lottery market gross revenue in Exhibit 79: Instant/scratch tickets examples Exhibit 80: Development and breakdown of sales of the German class lotteries NKL and SKL 2005 to Exhibit 81: Development and breakdown of gross revenues of the German class lotteries NKL and SKL 2005 to Exhibit 82: Development and breakdown of sales of the German TV lotteries 2005 to Copyright Strictly Enforced 6

7 Exhibit 83: Development and breakdown of gross revenues of the German TV lotteries 2005 to Exhibit 84: Examples of gambling machine halls Exhibit 85: Development of German gambling machine market size (gross revenues) 2005 to Exhibit 86: Development of number of gambling machines and gross revenue per machine 2005 to Exhibit 87: Digibet and Mybet betting shops Exhibit 88: Industry background of survey participants Mentioned companies 888 Diakonie Paddy Power Admiral Digibet Pagobet Aktion Mensch Digidis PMU Albers Wetten Eurogrand PokerStars ARD Fernsehlotterie EuroLotto.com Primebet Austrian Lotteries Eurosport RTL Austrian Vendo Expekt SBOBET Baden-Württembergische Spielbanken FDJ Schwechat Bayerische Spielbanken GamingVC (Casinoclub) SKL Bet3000 Gauselmann Group Sky Bet365 Goalbetter Sport1 Bet-at-home Happybet Sportingbet Betclic Everest Holtzbrinck Springer Betfair International Betting Association Stanleybet Betsson Interwetten Stargames Burda Intralot Sunmaker Bwin.Party Jahr+Achterfeld Sybilgroup Cashcade Jaxx Tipico Cashpoint Ladbrokes Tipp24 Casinos Austria Lottomatica TopSport Casinos Baden-Württemberg Merkur Totobet Casinos Saxony-Anhalt Megabet Unibet Casinos Schleswig Holstein Microgame VDAI Cherry Mybet Westdeutsche Spielbanken Deutscher Buchmacher Verband NKL WestLotto Deutscher Lotto- und Totoblock (DLTB) Novomatic Wettpunkt Deutscher Lottoverband Oddset William Hill Sample pages of report Copyright Strictly Enforced 7

8 About authors and contact information MECN MECN is a network of experts on issues concerning the media and entertainment industry. Together we provide in-depth knowledge, analysis, and advice to global clients. For the gambling industry, we provide market insights and strategic support to various clients ranging from bookmakers to state/public operators. MECN U.K. 207 Regent Street 3rd Floor London W1B 3HH United Kingdom MECN Germany Fürstenrieder Str. 279a Munich Germany info@mecn.net ARENDTS ANWÄLTE ARENDTS ANWÄLTE is one of the leading law firms for gaming and betting law in Germany ( Clients include many private bookmakers and remote gaming operators, licensed in the U.K., Austria, Malta, and Gibraltar, as well as affiliates and media companies in Germany. Over the last 10 years attorney-at-law Martin Arendts, M.B.L.-HSG, and his colleagues have dealt with numerous administrative law, constitutional law, tax law, criminal law, unfair competition law and trademark proceedings in connection with sports betting, lotteries, poker and other forms of gambling. ARENDTS ANWÄLTE Perlacher Str Grünwald Telephone: kanzlei@anlageanwalt.de Ingo Fiedler and Ann-Christin Wilcke - University of Hamburg Ingo Fiedler is a research associate at the Institute of Law & Economics at the University of Hamburg and a partner at Law & Economics consultancy Academicon. His research focuses on gambling and in particular online poker. Telephone: ingo.fiedler@public.uni-hamburg.de Ann-Christin Wilcke is a research associate at the Institute of Law & Economics at the University of Hamburg. Her research focuses on gambling and especially the betting behavior of gamblers. Telephone: ann-christin.wilcke@uni-hamburg.de Copyright Strictly Enforced 8

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